The Stochastic Indicator
- Thread starter jack hershey
- Start date
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All trades NQ03M, simulated with FuturesTrader.
Mon
Short @ 1067.00 9:57
Cover @ 1069.00 9:59 -2.00
Stochs were entwined below 20, MACD diff at -1.2, NQ started to sync with ES. Had a stop at -2 pt and was stopped out. Gotta learn to do wash trades.
Short @ 1063.00 10:21
Cover @ 1061.00 10:50 +2.00
Waited for morning low to be taken. Stochs still entwined below 20, MACD diff was >0.5 (positive value?).
Exit when fast line left 20 area.
Mon morning stochs and MACD readings were skewed because of the large gap.
Day 0.0
Tue
Long @ 1057.00 10:46
Sell @ 1062.00 11:02 +5.0
Entry when fast line crossed above 80, exit when it crossed below. Didn't recognized rocket forming. Didn't re-enter.
Day +5.0
Wed
Short @ 1063.50 9:41
Cover @ 1066.00 9:45 -2.5
Fast line crossed below 20 although it doesn't show on the historical chart. Then it snapped back out. Perhaps it's better to wait for both lines to cross, like Jack suggested. Or for the low to be taken, like dawg.
Long @ 1074.00 10:02
Sell @ 1072.00 10:08 -2.0
Fast line crossed above 80 and resistance at 1073 taken, MACD diverging. Stayed in till fast line crossed out. Failed at 1077.00, below yest high.
Short @ 1066.00 11:05
Cover @1066.50 11:13 -0.5
Both lines crossed below 20 on volume spike. Above day's low of 1063.00, and it failed at 1065.00. Red volume spike followed by low volume green bars on 1 min charts - called it a wash.
Both lines stayed below 20 afterwards but volume had dried up so stopped trading.
Day -5.0
Week 0.0
Conclusions:
- entries based only on fast line crossing lead to whipsaws
- wash trades help preserve your capital when a trade doesn't go your way - better that to wait for protective stop to be triggered
- it helps to pay attention to resistance/support lines and close the trade if it fails; one can always reenter if a rocket forms.
Mon
Short @ 1067.00 9:57
Cover @ 1069.00 9:59 -2.00
Stochs were entwined below 20, MACD diff at -1.2, NQ started to sync with ES. Had a stop at -2 pt and was stopped out. Gotta learn to do wash trades.
Short @ 1063.00 10:21
Cover @ 1061.00 10:50 +2.00
Waited for morning low to be taken. Stochs still entwined below 20, MACD diff was >0.5 (positive value?).
Exit when fast line left 20 area.
Mon morning stochs and MACD readings were skewed because of the large gap.
Day 0.0
Tue
Long @ 1057.00 10:46
Sell @ 1062.00 11:02 +5.0
Entry when fast line crossed above 80, exit when it crossed below. Didn't recognized rocket forming. Didn't re-enter.
Day +5.0
Wed
Short @ 1063.50 9:41
Cover @ 1066.00 9:45 -2.5
Fast line crossed below 20 although it doesn't show on the historical chart. Then it snapped back out. Perhaps it's better to wait for both lines to cross, like Jack suggested. Or for the low to be taken, like dawg.
Long @ 1074.00 10:02
Sell @ 1072.00 10:08 -2.0
Fast line crossed above 80 and resistance at 1073 taken, MACD diverging. Stayed in till fast line crossed out. Failed at 1077.00, below yest high.
Short @ 1066.00 11:05
Cover @1066.50 11:13 -0.5
Both lines crossed below 20 on volume spike. Above day's low of 1063.00, and it failed at 1065.00. Red volume spike followed by low volume green bars on 1 min charts - called it a wash.
Both lines stayed below 20 afterwards but volume had dried up so stopped trading.
Day -5.0
Week 0.0
Conclusions:
- entries based only on fast line crossing lead to whipsaws
- wash trades help preserve your capital when a trade doesn't go your way - better that to wait for protective stop to be triggered
- it helps to pay attention to resistance/support lines and close the trade if it fails; one can always reenter if a rocket forms.
Jack,
Thank you for your comments. Looking forward to your organized notes
My questions:
What do you mean by "tape moves to 15 min"?
What is C&R?
dawg, what prior low/high do you look at before taking a trade (day's, last 30 min etc)?
A preemptive note on the the scaling of my charts Jack - the scale of 10 makes some charts unusable (so flat you can't see anything). It all depends on the size of the window. Now a scale based on a percentage of the index value makes more sense, for instance always having the same percentace spanning the price axis - I aim for 50% which for NQ is ~ 50 points on the 5 min chart. For longer/shorter time frames, one would have to increase/decrease it.
Thanks and good trading.
ps: As I'm typing this there is a nice rally forming in NQ on low volume - intermediate traders are riding it perhaps.
Thank you for your comments. Looking forward to your organized notes
My questions:
What do you mean by "tape moves to 15 min"?
What is C&R?
dawg, what prior low/high do you look at before taking a trade (day's, last 30 min etc)?
A preemptive note on the the scaling of my charts Jack - the scale of 10 makes some charts unusable (so flat you can't see anything). It all depends on the size of the window. Now a scale based on a percentage of the index value makes more sense, for instance always having the same percentace spanning the price axis - I aim for 50% which for NQ is ~ 50 points on the 5 min chart. For longer/shorter time frames, one would have to increase/decrease it.
Thanks and good trading.
ps: As I'm typing this there is a nice rally forming in NQ on low volume - intermediate traders are riding it perhaps.
easiest way to explain is an example
look at a 5m ES chart of 3-25:
10:50 stoch(81.82, 75.13) macd hist: 0.71 volume 13,352 high of bar: 869.50
This is a clear rocket signal
1. I wait for the bar to close for clarity of signals. This keeps me from getting a signal during the bar and then have it reverse against me.
2. The high of the 'rocket signal' bar is 869.50...i buy on a break of this high.
also don't forget to graw in your trend channels (1-2-3 pts) to keep you with the trend longer. good luck.
look at a 5m ES chart of 3-25:
10:50 stoch(81.82, 75.13) macd hist: 0.71 volume 13,352 high of bar: 869.50
This is a clear rocket signal
1. I wait for the bar to close for clarity of signals. This keeps me from getting a signal during the bar and then have it reverse against me.
2. The high of the 'rocket signal' bar is 869.50...i buy on a break of this high.
also don't forget to graw in your trend channels (1-2-3 pts) to keep you with the trend longer. good luck.
Quote from vorzo:
Jack,
Thank you for your comments. Looking forward to your organized notes
My questions:
What do you mean by "tape moves to 15 min"?
What is C&R?
dawg, what prior low/high do you look at before taking a trade (day's, last 30 min etc)?
A preemptive note on the the scaling of my charts Jack - the scale of 10 makes some charts unusable (so flat you can't see anything). It all depends on the size of the window. Now a scale based on a percentage of the index value makes more sense, for instance always having the same percentace spanning the price axis - I aim for 50% which for NQ is ~ 50 points on the 5 min chart. For longer/shorter time frames, one would have to increase/decrease it.
Thanks and good trading.
ps: As I'm typing this there is a nice rally forming in NQ on low volume - intermediate traders are riding it perhaps.
Dawg's response is right on.
You can also see the transition going on for dawg. The market is better and he is getting more of the trends by the wyas (skills) he is now using. I think it is great that Dawg can tell you what to do and it is a terrific thing also that you can understand how the comments are very focussed.
Dawg is running weeks at a money velocity of about 4 points/contract a day now and we are into this for a month or so.
With trading on several markets (European, Aussie, and US) we can see that there is a transition that takes a matter of a few weeks to be running at an inital money velocity.
Every market has strong potential. We are terminating many aspects that cause losses. and now, through repetition, the trading day is becoming clearer and more routine.
This is where we begin to start anticipating from the vantage point of the present where things are under control.
Not jumping in too soon is happeniong with several of you and you are advising others who still do. They will follow your lead. Volume not sustaining is a major additional helper on discerning a "flaw" or "failure".
Later people say "Why didn't you tell us this in the beginning? The objective is to make money in a sustained way and then to continue to build facility and confidence.
Focus on rockets going into congestion at the sides of the S/R band. At first you exit on signal. Then you see days after day certain repetitive partial day sequences. AM, midday, and pm.
you now can rank pars of he day fr making profits. Top is AM; bottom is midday.
So we get set up in AM after synch and we see volume always sustains the moves.
By 11:15 you have one or two trades in. the first trade sets the S or R for the day. (Support or Resistance). The second trade if it occurs is because the first trade was slower than ususal and a reverse can occur. Otherwise you see highly volatile whipsaw.
Now we are getting to a place where we see trend endings. We can add to this view the consideration of getting into what follows the end of a trend. When we see we are on S or R, then we can consider trading the congestion by going against the whipsaw of congestion.
By learning the wash trade on all failures to trend. You gain a facilty and skill that eliminates being whipsawed and also concurrently allows you to gain the skill to be on the correct side of whipsaws.
So many people never get over being whipsawed. Here is why. They go out on stops as a modus. You can look at thread after thread. Look at the swing trade exit thread started by trader fader (?) We are breaking a habit of going out on stops by using signals to exit. We are starting to log stops, though and there are many reasons. We are bringing into the picture price formations and the significant signals within each formation. These are the stop log entries.
I get into trouble here a little. A log entry is sometimes misunderstood as a market entry. The phrase I use "potential stop" in place of log entry also causes some problems. Bear with me here. It does come out on the wash. I have rows of three ring binders that have completed logs. I will learn to scan and annotate and attach them as time passes. We can use these to cover the bases faster instead of waiting for all the events to occur.
Between logging and pint 1,2,3 and washing, you get to a point of consciousness then skill that you can slalom whipsaws on the right side. What actually happens mentally, then emotionally, is that this place allows you to see what it is like to make money.
By going to this trading level with one contract initially instead of piling on contracts doing rockets with multiples of initial capital, is that you still keep your edge for developing skill instead of just being rich.
The common tone of many traders is to jump into a whole system and try to make money. So they trade on paper and get to a plce where they are very deceptive. They feel so strongly that they know something. They are playing with Mulligans all the time. They slip and slide with their perception of timing. some people have determined that you will not do as well with real trading as paper trading. I feel that the transition and first real effort always end in failure to preserve capital. They have to refinance and start over by repeating the mistaken process over and over.
there are posts in ET that tell newbie to just tough it out for ....... The usual word is years. Our contrast with that is getting to an av of 4 points a day in a matter of weeks.
This plateau of rockets (fast pace) and sideling is very protective of your emotions and money. The discussion of entering, one line, both lines, end of 5 min bar. WOW. This is consciousness being established. Notice the high ratio of win profits to wash losses. One is going up and the other is declining. This is a feeling thing. Feeling like things are improving and advancing.
What if in a short while the trades go all along the trend? What if we slalom on congestion?
We actually have the tools and we are sharpening them up day by day on this plateau.
The C &R means cancel and replace.
If you have a protective stop in. You first cancel it before you replace it. So the term.
You can imagine how messy it could get while trading if you are sloppy. for oral C&R there are eleven separate events in the detail of it besides the other person's job.
As we do logs, I separate the data collection in monitoring from the C&R which I call reporting.
the key compoinents here are keep track of what is going on and figuring out the timing for doing things.
The period of C%R's I determine from price foramtions. For now, it is a time found by multiplying by 2 the period between peaks or troughs. Two cycle lengths.
This puts you in synch with the market. You set up reporting times. For me it is column changes on my trading sheet. I fill in time across he lanscape sheet. The rows are the eleven items.
If you set up the times in advance, then you do not have to decide "when" anymore.
You log stops in the column as well. Do entries, cross outs, and move the circled value.
When to the approaches read stuff and settle down. Do the deed by reporting using the circled value. This is the opposite of guessing the right time and the right value as something in the chart catches your eye. Work off the fast fractal for this stuff.
TAPING.
The "taping" process is one where you slow everything down. Price need never scream at you.
What we are doing is getting trend and volatilty to work together for us and also eliminate the noise that signals ride upon.
The market always has a threshold of noise. we want clear indicators and their respective signals. The pace of the market tells us how often we need to regard things. We want to calmly continue to continually make money and take profits.
We go to the pace the market tells us to.
In the AM, we pull down the carry over trend if possible, we sit through synch. we look for entry signals and as they arrive, we do point 1,2,3 to get the trend. This channel envelope is traversed over and over.
what we do is switch to slower fractals to see bars that traverse the channel all the time. we have a channel and we then fill it with bars the width of the channel. This puts us on the fractal that the market is trading upon. I call the bar-filled channel a tape. The chart shows a band (tape) moving along making money. All the traverses are there and they appear to be just getting the job done.
The indicators have calmed down and volume is changing more smoothly. We occassionally zip to the fractal for doing our stop log. we also hang on the 5 min as our nominal fractal. In this way we are current and not emotionally overpowered by stuff that shouldn't upset us.
If you have a protective stop in. You first cancel it before you replace it. So the term.
You can imagine how messy it could get while trading if you are sloppy. for oral C&R there are eleven separate events in the detail of it besides the other person's job.
As we do logs, I separate the data collection in monitoring from the C&R which I call reporting.
the key compoinents here are keep track of what is going on and figuring out the timing for doing things.
The period of C%R's I determine from price foramtions. For now, it is a time found by multiplying by 2 the period between peaks or troughs. Two cycle lengths.
This puts you in synch with the market. You set up reporting times. For me it is column changes on my trading sheet. I fill in time across he lanscape sheet. The rows are the eleven items.
If you set up the times in advance, then you do not have to decide "when" anymore.
You log stops in the column as well. Do entries, cross outs, and move the circled value.
When to the approaches read stuff and settle down. Do the deed by reporting using the circled value. This is the opposite of guessing the right time and the right value as something in the chart catches your eye. Work off the fast fractal for this stuff.
TAPING.
The "taping" process is one where you slow everything down. Price need never scream at you.
What we are doing is getting trend and volatilty to work together for us and also eliminate the noise that signals ride upon.
The market always has a threshold of noise. we want clear indicators and their respective signals. The pace of the market tells us how often we need to regard things. We want to calmly continue to continually make money and take profits.
We go to the pace the market tells us to.
In the AM, we pull down the carry over trend if possible, we sit through synch. we look for entry signals and as they arrive, we do point 1,2,3 to get the trend. This channel envelope is traversed over and over.
what we do is switch to slower fractals to see bars that traverse the channel all the time. we have a channel and we then fill it with bars the width of the channel. This puts us on the fractal that the market is trading upon. I call the bar-filled channel a tape. The chart shows a band (tape) moving along making money. All the traverses are there and they appear to be just getting the job done.
The indicators have calmed down and volume is changing more smoothly. We occassionally zip to the fractal for doing our stop log. we also hang on the 5 min as our nominal fractal. In this way we are current and not emotionally overpowered by stuff that shouldn't upset us.
1. vol bo, stoch 50% bo, macd bo from 0.
10:25 macd xo w/ increasing volume stoch broke below 50% and macd broke away from 0.
short @ 870.25
cover @ 870.25 0.00
day: 0.00 7 days: +22.00
had my trend channel drawn, but mkt had very poor follow thru and volume, but as long as it stayed in my channel i was in the trade. Eventually turns into a potential rocket, but there was not a good macd hist reading (-0.4 or lower). And at 11:15 there was a 5m macd xo, but price was still within my trend channel. So when my trend channel was broken i exited flat.
The low volumes-lack of follow thru so far today leads me to believe that there is not much to trade. (written at 11:30)
11:50 rocket NO TRADE
11:50 s(88.89, 78.75) macd hist +0.45 but volume stinks v: 3400
Due to the low volume i did not take this trade. Looks like you could have made a point or two.
2. rocket end---->macd xo--->wash trade
12:35 macd xo and uptrend channel ends and previous rocket ends i got short at 872.75. forms a small trend channel, but douldrums set in and volume continues to stink don't like the action as mini channel is broken and i exited at 873.00. pretty much a wash trade. held for a half hour and no real movement. 1:15 also had a macd reverse xo and macd appears to be pretzeling. also stoch is hanging around 50% nuetral line.
really just a big sideways channel today. 867-875 range.
short @ 872.75
cover @ 873.00 -0.25
day: -0.25 7days: +21.75
3. After terror rumor and refutal of the rumor.
2:25 s(81.08, 79.28) macd hist +0.93 high 872.50.
it was REAL WHIPPY at this point so i tried to define a trend channel and buy near the support of the channel and improved my price by 1.00. entered at 871.75. 3:10 mkt breaks trend channel and has a 5m macd xo and leave 75 zone. exited at 871.50.
long @ 871.75
sell @ 871.50 -0.25
day: -0.50 7 days: +21.25
There was another rocket short w/ 3:55 entry but it was so late in the day i passed. Just a crappy range day and i have not done well on these types of days, but i didn't hurt myself today.
an exhausting day.
10:25 macd xo w/ increasing volume stoch broke below 50% and macd broke away from 0.
short @ 870.25
cover @ 870.25 0.00
day: 0.00 7 days: +22.00
had my trend channel drawn, but mkt had very poor follow thru and volume, but as long as it stayed in my channel i was in the trade. Eventually turns into a potential rocket, but there was not a good macd hist reading (-0.4 or lower). And at 11:15 there was a 5m macd xo, but price was still within my trend channel. So when my trend channel was broken i exited flat.
The low volumes-lack of follow thru so far today leads me to believe that there is not much to trade. (written at 11:30)
11:50 rocket NO TRADE
11:50 s(88.89, 78.75) macd hist +0.45 but volume stinks v: 3400
Due to the low volume i did not take this trade. Looks like you could have made a point or two.
2. rocket end---->macd xo--->wash trade
12:35 macd xo and uptrend channel ends and previous rocket ends i got short at 872.75. forms a small trend channel, but douldrums set in and volume continues to stink don't like the action as mini channel is broken and i exited at 873.00. pretty much a wash trade. held for a half hour and no real movement. 1:15 also had a macd reverse xo and macd appears to be pretzeling. also stoch is hanging around 50% nuetral line.
really just a big sideways channel today. 867-875 range.
short @ 872.75
cover @ 873.00 -0.25
day: -0.25 7days: +21.75
3. After terror rumor and refutal of the rumor.
2:25 s(81.08, 79.28) macd hist +0.93 high 872.50.
it was REAL WHIPPY at this point so i tried to define a trend channel and buy near the support of the channel and improved my price by 1.00. entered at 871.75. 3:10 mkt breaks trend channel and has a 5m macd xo and leave 75 zone. exited at 871.50.
long @ 871.75
sell @ 871.50 -0.25
day: -0.50 7 days: +21.25
There was another rocket short w/ 3:55 entry but it was so late in the day i passed. Just a crappy range day and i have not done well on these types of days, but i didn't hurt myself today.
an exhausting day.
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